In 1983, having discontinued their studies after school, Coimbatore-based brothers B Soundararajan and GB Sundararajan wanted to do something "on their own".

And they got into the poultry business. It was a bread and butter issue, recalls Soundararajan. "We saw the business potential much later, in 1998," he adds. Until then they had to raise money from chit funds or private lenders. Banks didn't let them borrow.

And then contract farming happened. Which meant they decided to supply "interested" farmers one-year old chicks, medicines and chicken feed plus a fee for growing the chicks for up to 40 days — and they sold the chickens in the market.

Starting with an investment of Rs 5,000 in the forlorn town of Udumalpet near Coimbatore, they jacked up a business of Rs 7 crore within the first three years of operations, backed by 30 contract farmers. "The name contract farming came into existence many years later," Soundararajan explains.

The local poultry industry was valued at Rs 450 crore. Last fiscal, their company, Suguna Poultry, touched revenues of more than Rs 4,200 crore, working with 18,000 contract farmers; the poultry meat business comprises more than 65% of the Rs 50,000 crore poultry industry.

Sure, this is an atypical rags-to-riches story of entrepreneurs making the most of an opportunity to hitch a ride to big gains. In fact, their business model clicked perfectly at a time when Indians had started consuming more and more meat, especially chicken. More players have entered the segment, and a few of them are growing faster than the industry growth of 12-13% per annum.

Unfortunately, there is a huge cost — of the environmental kind — in this fastest-growing agricultural segment in the country. With close to 95% of the chickens produced in India being sold on what Soundararajan calls "street-side stores" the quantum of pollution is rapidly increasing, and has reached worrying proportions. The chicken waste, feathers and concomitant dirt from such stores are spreading germs and diseases in many parts of India.

"I agree. That problem [of pollution caused by waste] is grave on the marketing side," admits Soundararajan. "Waste disposal is an issue that has to be addressed through stringent regulations," he adds, conceding that there's a flipside to the growth story.

A Tale of Growth

Rising disposable incomes, quick urbanisation and the expansion of the Great Indian Middle Class are a few key drivers of the stunning growth in chicken business. Alongside, integrated poultry production and contract farming have lowered the cost of production of chicken.

Says Arabind Das, chief operating officer, Godrej Tyson Foods, a joint venture between Godrej Agrovet, the agri-business arm of the Godrej group, and Tyson Foods, the world's largest meat processor and marketer: "What was until a few decades ago a backyard operation, chicken farming is fast moving into an organised business."

Other major players in the poultry meat business include Pune-based Venkateshwara Hatcheries, Pioneer Poultry, Sky Lark, Amrit Group and so on. PG Pedgaonkar, deputy general manager, Venkateshwara Hatcheries, says India's chicken consumption has risen to more than 3 kg per head a year from less than 1 kg a decade earlier. He expects the segment to grow 12-13% annually. He sees chicken consumption doubling over the next five years, signaling further growth.

Das puts it more succinctly: "Per capita incomes have risen, leading to a change of lifestyle. And many Indians have started to shift from plant-based proteins to chicken for protein availability. Many meat eaters are switching to chicken out of health consciousness." He also says that the eating-out phenomenon has contributed to higher chicken consumption. Over the past decade, the prices of chicken rose at a much lower rate compared with those of plant-based proteins such as French beans, he adds.

Good Bet for Farmers

While entrepreneurs and corporates have hit pay dirt thanks to the massive growth in the poultry meat business, farmers, too, have found life much easy. "The companies offer us everything — from chicks to veterinary services to chicken feed to training," says Coimbatore-based Kanda Swamy, who got into chicken farming in the early 2000s. "I found it easy to do this.

We are told the companies are making a killing from our services. But we are happy with what we get because the only investment from our side is the land and we don't need much of it," he says. He would only say "I am happy", but doesn't disclose how much he earns for growing a chick.

Maharashtra, Karnataka and Tamil Nadu are the main centres of chicken production. Interestingly, according to India Environmental Portal, per capita egg and chicken meat availability is the highest in the southern states, followed by the northern and western states, and is lowest in the eastern and central states.